USDA Projects Rising Carryover For Corn and Beans In 2014-15

Overnight highlights: As of 6:15 a.m. CT, corn futures are trading steady to 1 cent lower in most contracts, soybeans are mostly around 1 cent lower and wheat futures are mixed with SRW and HRW contracts mostly around a penny lower. Cattle and hog futures are slightly firmer in electronic trade.

* USDA releases full S&D tables. USDA highlighted its projections for planted acreage and its price outlook yesterday. This morning they are filling in the blanks, presenting the full Supply & Demand tables. For corn, USDA sees the crop virtually steady with year-ago at 13.985 billion bu., with carryover swelling to 2.111 billion bu. at the end of the 2014-15 marketing year. For soybeans, the crop is projected to rise to 3.55 billion bu., with carryover expected to nearly double to 285 million bushels. For wheat, the crop is projected at 2.160 billion bu., with carryover expected to inch up to 587 million bushels.

The long and short of it: These figures are friendlier than the previous baseline projections for corn, gloomier for soybeans and virtually neutral for wheat. The initial price response from the market is limited, which signals they realize these are really nothing more than a "best guess" at this point. Many factors will change from current assumptions to shape crop size and carryover before the 2014-15 marketing year is complete on Aug. 31, 2015.

* USDA lowers corn acreage outlook, raises beans. USDA Chief Economist Joe Glauber told us it was coming and he delivered. In his presentation at USDA's Outlook Forum yesterday, Glauber said his agency projects corn plantings to fall to 92 million acres this year. That's down 1.5 million acres from the baseline projections released just last week and 3.4 million acres fewer than last year. For soybeans, USDA projects plantings at 79.5 million, which is 1.5 million acres higher than the baseline projections and 3 million acres more than year-ago. The changes from the baseline projections were driven by the fact the baselines assumed the old farm bill while the new projections are representative of USDA's outlook under the new farm bill.

The long and short of it: The corn acreage projection was about as expected. The projected jump in soybean acres wasn't as much as anticipated and therefore, price-supportive for the market yesterday despite the increase.

* China corn, DDG rejection talk calms. Through December and early January, fear of Chinese rejections of U.S. corn and dried distillers grains (DDGs) due to the presence of MIR 162 dominated the marketplace. That talk has calmed and January import data from China shows why, especially on the DDG front. China imported 641,843 MT of corn from the U.S. last month, up 63% from year-ago and a modest 0.8% higher than December. China's DDG imports, of which it gets from the U.S., totaled 575,462 MT last month, up 500% from year-ago and the second highest monthly total ever.

The long and short of it: DDG imports for January signal there were few rejections. The threat of rejections of corn cargoes will likely slow U.S. corn shipments to China this month.